SecProbe.io

January 7, 2025
Christopher Britt
Chief Executive Officer
Chime Financial, Inc.
101 California Street, Suite 500
San Francisco, CA 94111
Re:Chime Financial, Inc.
Draft Registration Statement on Form S-1
Submitted December 9, 2024
CIK No. 0001795586
Dear Christopher Britt:
            We have reviewed your draft registration statement and have the following comments.
            Please respond to this letter by providing the requested information and either
submitting an amended draft registration statement or publicly filing your registration
statement on EDGAR. If you do not believe a comment applies to your facts and
circumstances or do not believe an amendment is appropriate, please tell us why in your
response.
            After reviewing the information you provide in response to this letter and your
amended draft registration statement or filed registration statement, we may have additional
comments.
Draft Registration Statement on Form S-1
General
We note that in the summary section and throughout the draft registration statement
you refer to your "FDIC-insured bank partners," your members accessing "FDIC-
insured checking accounts" and "FDIC-insured high yield savings accounts." Please
revise throughout to address the following:
•add a clear statement in the summary and business sections that you are not an
FDIC-insured bank;
•add risk factor disclosure addressing material risks your members face by holding
their deposits with you, as opposed to holding their deposits with an FDIC-insured
bank;
add risk factor disclosure discussing the fact that unlike the situation with a bank •1.

January 7, 2025
Page 2
bankruptcy, the FDIC would not place you under receivership in the event of a
bankruptcy;
•clarify what you mean by your statement on page 134 that your "members have
deposit account agreement directly with [your] bank partners";
•clarify if your members can choose which of your two bank partners to hold their
debit or saving deposits with and if so, clarify also if they know their Bancorp or
Stride Bank issued checking and savings account numbers; and
•if your members do not have debit or savings account numbers for their accounts
at Bancorp or Stride, revise to make that clear and describe material risks
presented.
2.Based on disclosure in several sections of your prospectus, specifically pages 2
through 4, 6, 11, 58 and 100, it appears that you have commissioned multiple industry
surveys/reports from third party providers. On page 58, for example, you refer
specifically to the "Chime Banking," "Switcher Survey," and the "Service NPS
Surveys" commissioned by you. Please revise your disclosure throughout the draft
registration statement to identify all of the third party or parties who issued such
reports and file each party's consent as an exhibit to the registration statement. Refer
to Rule 436 of the Securities Act of 1933.
3.Please provide us with supplemental copies of all written communications, as defined
in Rule 405 under the Securities Act, that you, or anyone authorized to do so on your
behalf, have presented or expect to present to potential investors in reliance on Section
5(d) of the Securities Act, whether or not you retained, or intend to retain, copies of
those communications. Please contact Tonya K. Aldave at (202) 551-3601 to discuss
how to submit the materials, if any, to us for our review.
Glossary of Terms, page iii
4.Please revise here or where appropriate to clarify the following definitions and how
they relate to each other and your operations. For example, explain the following:
•how Attach Rates are different from Active Members. Are Attach Rates more
broadly defined in terms of what activities are counted?
•how transaction profit is different from cumulative transaction profit;
•whether "primary account relationship" or "primary financial relationship"
require members to set up a direct paycheck deposit account.  You also use
"central financial hub," "central hub" and similar terms, but it is unclear if these
are used synonymously with the defined terms; and
•the significance of sweep arrangements being with regional banks "in regions
where members live."
5.It appears that competitors use metrics similar to the ones appearing here, including
Active Member and Purchase Volume. Please revise here and page 72 to address the
extent to which your terms and definitions may be different from ones used by other
companies and include cautionary language, if appropriate.

January 7, 2025
Page 3
Prospectus Summary, page 2
6.Please revise your prospectus summary to include your net losses for the most recent
audited periods to provide a financial snapshot of your company and to balance the
disclosure in the summary.
7.In order for investors to understand how you interact with merchants, bank partners,
Chime members and other participants in the life cycle of your most significant
products, consider providing a graphical presentation of the card payment process for
Chime member's purchase transaction similar to what is currently presented on page
71. The presentation may permit investors to better understand your discussion of
your business model presented in the summary section.
8.We note the discussion on pages 90, 135 and elsewhere regarding your
revenues "based on high-yield savings balances." Please revise to clarify how you
earn revenue from relationships whereby your partner banks provide interest-bearing
savings accounts. Disclose the range of "high-yield' interest rates members are able to
receive based on historical rates.
9.We note the references on pages 8 and 9 to your differentiated approach and risk
decisioning platform for credit risk, and your "strong underwriting capabilities." We
also note the Risk Factor on page 30 discussing your risk management framework and
underwriting standards with respect to determining the availability and scale of
liquidity products, which "may not offer adequate protection against the risk of
nonpayment." Please revise here and Competition on page 133 to clarify any
competitive advantage you believe you have with respect to underwriting standards.
Please also revise Business to further clarify your standards and metrics used in
approving products, such as FICO scores and credit checks, if applicable.
10.We note references here and elsewhere contrasting your platform with traditional
banks, which you say focus on serving people with the largest deposits and highest
credit scores. Please clarify the type(s) of consumers that you target. For example, it is
unclear if most accounts are with prime, near prime, or subprime customers.
11.We note the risk factor on page 51 regarding executive officers and others owning a
percentage of shares that will allow them "to influence or control" matters requiring
approval by stockholders. Please revise to clarify if you will be a control company
under applicable listing standards.
We Solve for Critical Member Needs, page 7
12.Please briefly explain the automatic features "Round Ups" and "Save When I Get
Paid" and explain if members are automatically enrolled into these features and need
to proactively opt out if they do not want to participate in these features.
Digital-First Partnership Strategy, page 8
Noting your disclosure that you partner with two banks -- Bancorp Bank and Stride
Bank -- please revise here or elsewhere as appropriate to specify what percentage of
your member accounts is held at each of the two banks, including by type of
account, such as checking or savings accounts. In addition, describe material risks
associated with any possible concentration of deposits with one or both of your 13.

January 7, 2025
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partner banks.
Risk Factors, page 17
14.Please revise throughout Risk Factors to include quantitative and qualitative
information to put the particular risk in context. For example,
•revise the first risk factor on page 23 to quantify your net losses;
•explain what "service level commitments" are on page 26 and quantify the
approximate percentage of transactions processed via your proprietary payment
processor as compared to those of third parties. In this regard, we note the
reference on page 31 to "a portion of payment card transactions [at] a third-party
payment processor";
•where you state "there have been" instances or you "have in the past" experienced
situations discussed in Risk Factors (as on pages 26 and 27), clarify the extent to
which they had a material impact on your business or results of operations;
•quantify the ratios or covenants from your credit facility on page 46;
•identify the "certain liquidity products" and "certain minimum collateral and
reserve account balances" on page 46; and
•identify the "certain of our metrics and other figures" in the first risk factor on
page 48.
15.We note the discussion on page 37 regarding pass-through insurance and the risk of a
bank partner failing or entering receivership proceedings. Please expand your risk
discussion to also address the risk of non-bank third parties failing. It is unclear, for
example, if the risk of members seeking to hold you liable for deposits owed to them
may be greater in the event of a non-bank partner failing.
The CFPB has significant authority to regulate consumer financial services, page 37
16.Please revise the reference to "a subset of former members who received allegedly
delayed deposit-account-balance refunds" to provide further context. For example, it
is unclear if these were Pay Anyone payments that did not settle but were not
refunded to members. Please also revise the second risk factor on page 38 to clarify if
the February 2024 DFPI consent order was related to the March 2021 settlement
agreements with the DFPI.
We are subject to laws and regulations covering anti-corruption, anti-bribery, trade sanctions,
anti-money laundering, and similar laws, page 42
17.We note statements on your website that members can use Pay Anyone to instantly
pay friends through Chime, whatever bank account they use. Please reconcile with the
statement on page 42 that Chime "does not currently engage as a business in the
transfer of funds."
We use open source software in our products, page 45
18.We note your disclosure here that you use open source software in your products.
Please clarify whether the components that utilize AI are governed by those open
source licenses and address any related risks.

January 7, 2025
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Management's Disclosure and Analysis of Financial Condition
Payments-Driven Revenue Model, page 69
19.Please briefly explain what you mean by "SpotMe tips" here and on page 135. Clarify
how tips are "voluntary" and explain the extent to which there is an expectation from
members for something in return for their tips.
Our Focus on High Impact Innovation, page 69
20.We note that not all text in the two graphics that currently appear on pages 70 and 71
is legible. Please revise to include legible graphics.
Key Metrics and Non-GAAP Financial Measures, page 72
21.We note disclosure on page 71 of your intention to separately disclose the percentages
of revenues and Purchase Volume for interchange-based debit card transactions and
credit card transactions. Please revise your Key Metrics table on page 72 to separately
present Purchase Volumes for your debit card transactions and your credit card
transactions and also consider disclosing the number of transactions for each period
presented. Further, please consider disaggregating your Active Members disclosures
to separately present Active Members participation in your product offerings (i.e.
checking account, Chime Debit Card, Credit Builder Credit Card, etc.), which are
disclosed beginning on page 115.
22.Please revise Purchase Volume on page 72 to explain in plain language how Purchase
Volume is related to revenues. With respect to your non-payments revenues, clarify
the key contributors to "platform-related revenue" and consider using hypothetical
examples to demonstrate the flow of funds.
Adjusted EBITDA and Adjusted EBITDA Margin, page 78
23.Please revise your draft registration statement to discuss the "certain legal and
regulatory charges" included in your reconciliation of net loss to adjusted EBITDA
for each period presented.
24.Please revise your draft registration statement to disclose what comprises the Other
(income) expense, net adjustment in your net loss to adjusted EBITDA non-GAAP
reconciliation on page 79.
Our Ability to Increase Existing and New Product Adoption With Our Active Members, page
84
25.We note your disclosure that the adoption of Credit Builder by your Active Members
impacts your Average Revenue per Active Member ("ARPAM") because credit card
purchase transactions monetize at higher rates of interchange compared to debit cards.
Please revise your draft registration statement, within your Management's Discussion
and Analysis ("MD&A") and where appropriate, to elaborate on this statement and
discuss interchange fees and fee rates received from debit cards separately from credit
cards, the reason(s) for differences in interchange fees and fee rates and the related
impact to your revenues, and how it impacts your business and marketing for these
products.

January 7, 2025
Page 6
Liquidity Products, page 85
26.Please revise your disclosures here or elsewhere in your draft registration statement to
discuss in further detail your relationship with Primacy. Specifically, clearly disclose
whether Primacy represents an internally generated software or if you have entered
into a third party contractual arrangement for these services, and if so, the terms of
this contractual arrangement.
27.Please revise your draft registration statement here or elsewhere to provide a
rollforward of your product collateral line item for each period presented. Please
consider presenting this rollforward separately for both The Bancorp Bank N.A.
("Bancorp") and Stride Bank N.A. ("Stride") and revise to provide an explanation to
help in understanding the reason(s) for movements within this balance sheet line item.
Please also revise your draft registration statement to explain the relationship
between movements in your product collateral and product obligation liability.
28.We note disclosure that with respect to MyPay offered by Stride, historically Stride
has retained a portion and you have purchased a portion of the outstanding receivables
related to this product. Please revise your draft registration statement to disclose the
outstanding amounts of MyPay loans held, disclose where these loans are presented in
your financial statements, and explain how you determine the portion of these
outstanding receivables to purchase.
29.Please revise your draft registration statement to disclose the fees paid to Bancorp that
are determined based upon the outstanding balance of receivables that they hold under
their commitment to fund your MyPay and SpotMe products. Please also tell us and
revise your draft registration statement to disclose how these fees are determined,
whether you derive any revenues from these products, and where these fees and
related revenues, if any, are reflected in your financial statements.
Components of Our Results of Operations, page 86
30.We note your references to "third party partnership agreements through products such
as Experian Boost or [your] Offers Marketplace." Please revise to describe these
products.
Results of Operations, page 88
31.We note footnote 1 to your Consolidated Statement of Operations discloses $1.3
million of depreciation and amortization recorded in Cost of Revenues for the fiscal
year ended December 31, 2023. Please tell us and revise your draft registration
statement, where appropriate, to explain how you determine the depreciation and
amortization expenses recognized as a Cost of Revenue separately from the
depreciation and amortization expenses recognized as Operating Expenses.
Payments Revenue, page 90
We note disclosure that your payments revenue increased during fiscal year e